Clydesdale has a long history but has only just gone independent after 95 years under the ownership of other banks

“In Moody's view, this indemnity, which is considered by the agency more than adequate for a bank the size of Clydesdale, materially reduces the tail risks associated with further, unexpected conduct charges and protects the bank's capital,” the agency said.

Its standalone rating has been raised from Ba1 to Baa3.

But the sale by NAB still brings other risks, leading to the deposit rating downgrade.

"The rating actions take into account three main factors: firstly, our upgrade of Clydesdale's standalone baseline credit assessment (BCA); second, the elimination of potential support from former parent National Australia Bank Limited on completion of its demerger; and thirdly, a shift in the bank's liability structure exposing senior deposits and creditors to higher risk," said Moody’s Dany Castiglione.

"CYBG welcomes the upgrade of its standalone BCA rating, reflecting the improved credit fundamentals following the finalisation of the demerger,” the bank said.

“As announced on February 2, 2016, CYBG does not consider the downgrade of the long-term deposit and commercial paper rating to have any material impact on its or the bank’s ability to raise funding, the overall cost of funding or the financial outlook for CYBG or the bank."